Microsoft is cutting 1,400 jobs today and another 3,600 over the next 18 months in the wake of today's news of a 11 percent drop in fiscal second-quarter net income, the company announced today.

The cuts will be in R&D, marketing, sales, finance, legal, HR, and IT. These reduction will reduce the company’s annual operating expense by about $1.5 billion and reduce fiscal year 2009 capital expenditures by $700 million.

“While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach,” said Steve Ballmer, chief executive officer at Microsoft. “We will continue to manage expenses and invest in long-term opportunities to deliver value to customers and shareholders, and we will emerge an even stronger industry leader than we are today.”

No word yet on if or how this will affect the company's Xbox 360 division, though the earnings report found that the entertainment and devices division had sales growth of 3.5 percent.

The news follows on the heels of Sony's announcement that they are planning "headcount reduction" In game, music and movie divisions.